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Adverse Action | HR Expert
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What Is Adverse Action?

Adverse action is an action taken by an employer which is considered unlawful under the Fair Work Act 2009.

These actions can include, but are not limited to:

  • discrimination against an employee or prospective employee
  • demoting an employee or altering their position to their detriment
  • dismissal or action taken against an employee for exercising a workplace right
  • injuring a worker or contractor
  • refusing to supply goods or services to a contractor
  • in some cases, issuing an employee with a disciplinary warning

An employee can also take an adverse action against its employer where the employer does or threatens to terminate their employment or commence an industrial action against the employer.

It is important to know that a claim of adverse action can also be made by contractors, probationers, prospective employees and employees who are above the high-income threshold. A claim of adverse action can only be invoked where the intention behind the conduct is prohibited, such as punishment for the exercise of or proposed exercise of a workplace right.

For employer’s, adverse action claims are highly significant as they:

  • are widely open to interpretation
  • damages for adverse action are uncapped
  • the time limit for lodging a claim is extended
  • the scope of what is considered adverse action is very broad

What is a Workplace Right?

A workplace right includes:

  • Privileges, rights or responsibilities provided for under workplace legislation or instruments or by an order made by an industrial body;
  • One’s ability to commence proceedings under workplace legislation or instruments; and
  • One’s ability to complain or inquire to an industrial body seeking that they order enforcement with workplace legislation or instruments.

Avoiding Adverse Action

In order to minimise the risk of adverse action claims, employers must be very open and clear regarding the reasoning for why they are taking action against the worker. The reason needs to be related to the worker’s conduct or performance, with the employer being able to adequately prove this conduct actually occurred.

Employers should ensure they keep clear documentation of the reason for and why the action was taken. This way if an adverse action claim is made, employers can prove the action was taken for the right reasons and not due to an employee exercising a workplace right.

Every workplace should have fair and consistent policies and procedures in place which is communicated to all employees when they commence their employment. These should also be included in your employee handbook stipulating when and why action may be taken against an employee.